“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”– Winston Churchill
There’s a big brouhaha these days over socialism. The president declared that we would never become a socialist state. And virtually all of the Republicans use the word socialist as an ad hominem and see socialism as anathema to sound government. But the progressives on the left, Senator Sanders among others, have been promoting socialist programs like universal health care and free college for many years. And the newly elected and somewhat noisy and naïve Congresswoman from New York, Alexandria Ocasio-Cortez and, has trotted out her “Green New Deal” to save the planet as only liberals can.
But we are a part socialist and part capitalist country as demonstrated by the political philosophies of the two major political parties. That is, we are a hybrid. And as we’ve seen time and again, reaching a compromise between those extremes is difficult as best and often impossible at worse. As the lawyer Jerome Frank remarked to the economist Stuart Chase during the Great Depression, “We socialists are trying to save capitalism and the damned capitalists won’t let us.”
Of course, socialism is both a political system and an economic system, whereas, capitalism is purely economic. Capitalism flourishes under a government that promotes individualism, free markets and limited interference. But capitalism, per se, is undemocratic and often leads to a sharp divide between the wealthiest citizens and the poorest. To borrow from Karl Marx, money is the opioid of capitalism.
Socialism as a political system can have a range of meanings. One extreme is the Marxist version of communism as seen in the Russian Revolution that produced the Soviet Union. It lead to massive corruption and poverty. The central authority controlled the means and quantity of production and places strict rules of businesses. Economic growth was flat.
Although China became a communist nation with the rise to power of Mao Zedong in 1949 until his death in 1976, it has gradually reduced its oppressive rule while expanding capitalism to the point where it is now one of the leading economies in the world and may even surpass the U.S. in the next few years. So, even though China calls itself communist, it is actually a hybrid socialist/capitalist country.
Here in the U.S. socialism is characterized as government programs paid for the government revenues, mostly income taxes. It is also called socialism when the government imposes rules and regulations on the private sector.
But socialist programs often work best as a catalyst for economic growth. One of the most successful programs came right after WWII. The 1944 GI Bill of Rights provided veterans with payments of tuition and living expenses to attend high school, college or vocational/technical school, low-cost mortgages, low-interest loans to start a business, as well as one year of unemployment compensation. All benefits were tax free. As a result, the U.S, economy after the war and throughout the 1950’s and beyond became the fastest growing and most expansive in history – mainly due to that highly socialist government program. This, in spite of the fact that, during this period, the top income tax rate for individuals was 91 percent, and 50 percent for corporations.
Of course, the U.S. tax code is full of socialist benefits. These include extensive tax breaks for businesses and innumerable deductions and exemptions for individual taxpayers. These are the result of social engineering by the government and constitute punishments and rewards for certain economic decisions.
This country is replete with what can only be described as socialist programs. You’ve benefitted from those programs if you’ve ever traveled on public streets, roads, highways, and turnpikes; received Social Security, Medicare, Medicaid, food stamps or unemployment benefits, attended public schools or colleges, used public transit and ever had power, water, sewage or trash collection provided by local government; enjoyed public parks, playgrounds, and playing fields; are under police and fire protection, with emergency medical treatment and 911 service available. And nobody, including the very wealthy, wants to give up those benefits. And rich seniors are not turning down Social Security or Medicare.
By the way, I’m sure the right wingers don’t want to be reminded of the fact that the Department of Defense and Homeland Security are both socialist institutions by definition. They are run by the government and paid for with tax dollars.
There is a lot of controversy these days about something called “democratic socialism.” But both socialism to democracy are bottom up political systems – they are about the people being in charge.
To that point, there is a strong argument to be made that our country is founded primarily on democratic socialist principles. In fact, president John Adams actually declared that we are a socialist country when he wrote, “Government is instituted for the common good; for the protection, safety, prosperity, and happiness of the people; and not for profit, honor, or private interest of any one man, family, or class of men.”
But here in the 21st century “profit” and “private interest” are the implicit forces that drive the economy. The rich are reluctant to provide a safety net to those in need. That puts us on a trajectory to bypass our democracy and effectively become a plutocracy or oligarchy. If so, then the Great Experiment of American democracy is in great peril.